Gestión de marca

A key feature of Harley’s turnaround during the 1980s was the quest for a new rela-tionship between management and employees. Following the management buyout, Table 8.7 Harley-Davidson’s main facilities, 2004

Location Function Square feet

Wisconsin

Milwaukee Corporate headquarters 515,000

Wauwatosa Product development center 397,000

Wauwatosa Engine manufacturing 422,000

Menomonee Falls Engine and transmission production 479,000

Franklin Parts/accessories distribution center 250,000

Tomahawk Fiberglass parts production/painting 189,000

Pennsylvania

York Final assembly plant, parts and painting 1,331,000

Missouri

Kansas City Manufacturing, painting 330,000

Brazil

Manaus Manufacturing 30,000

Source: Harley-Davidson 10K l Report, 2003.

Harley’s new management team systematically rethought management–employee relationships, employee responsibilities, and organizational structure. The result was a transformation in employee commitment and job satisfaction. “What other company has employees who tattoo the company name on their bodies? Or offers not just a job but a lifestyle?” queried an assembly-line worker at Harley’s Milwaukee plant. Harley had a no lay-off policy, 12 weeks of paid maternity leave, and unlimited sick days for staffers.

The process of management innovation was a continuing one. Harley’s new North-land Plant in Kansas City featured a management structure and working methods designed to promote employee commitment and self-management. “I’m not aware of anybody anywhere doing anything that emulates this,” said plant chief Karl Eberle.¹² In contrast to the traditional layout of Harley’s other plants, the Northland Plant did not have a management space that overlooked the floor production from a glassed-in office upstairs. Instead, the plant manager and other administrators worked in a

“bullpen area” on the production floor of the 330,000 square-foot building.

In an effort to engage and motivate the entire plant workforce, management devel-oped a novel operating structure different from anything else within the company. The structure comprised three types of teams:

• Natural work groups – every worker belonged to a work group, with 8–15 people per group.

• Process operating groups – comprised representatives from each work group. There were four process operating groups; one for each of the plant’s four operating divisions: paint, assembly, fabrication, and engine production.

• Plant leadership group – a 14-member committee, responsible for governing the facility. It comprised the plant manager, the presidents of both unions representing the plant workforce, four elected representatives from the process groups, an elected representative from maintenance, and six administrators.

Harley’s belief in the effectiveness of non-hierarchical, team-based structures in fos-tering motivation and accelerating innovation and learning was evident throughout the company. The Harley-Davidson Operating System was a philosophy and a method-ology for continuous improvement involving team-based efforts to identify wasted steps, pare costs, and enhance quality throughout manufacturing.

The movement toward a flatter, more team-based organizational structure extended to Harley’s corporate headquarters. “In our new organization,” explained Clyde Fessler, VP for business development, “the Harley-Davidson Motor Company has been divided into three broad, functional areas called Circles. They are: the Create Demand Circle (CDC), the Produce Product Circle (PPC), and the Provide Support Circle (PSC). Each Circle is composed of the leaders representing the functions within it. The flexibility of the organization extends even to the decision of which functional areas are identified within a given circle. It is quite possible that Circle definitions may shift from time to time, depending on the demands of the business.”¹³Each Circle operated as a team with leadership moving from person to person, depending on the issue being addressed.

Overall coordination was provided by the Strategic Leadership Council (SLC) compris-ing individuals nominated by each of the three Circles. Explained Fessler:

The role of the SLC is to resolve issues that have not been settled previously by consensus in Circle meetings. Leadership of the Council also rotates, shifting to the Circle represen-tative who “owns” the topic being discussed . . . The Circle format is especially valuable in that it facilitates systems thinking in our strategy implementation. If the marketing func-tion plans to focus on a specific product, the Circles provide an opportunity to get feedback from manufacturing about timing and availability. If the Manufacturing function needs to shut down its operations to upgrade equipment, the Circle structure allows all the affected functions to be involved in the decision. . . . Defining the roles and responsibilities of each functional Circle and each Circle member has brought clarity, which in turn stimulates dialogue, trust, and eventually, non-threatening confrontation . . . Collaborative interde-pendent teams may not be able to move as quickly as the single decisive leader in a hier-archy, but they can be more innovative and resourceful and, ultimately, more effective in today’s complex business climate.¹⁴

COMPETITION

Despite Harley’s insistence that it was supplying a unique Harley experience rather than competing with other motorcycle manufacturers, the more Harley took market share from other manufacturers, the more it was engaged in a brutally competitive market.

By broadening its market, Harley came into closer competition with its Japanese and European rivals – Buell’s mission was to compete directly with them. And the more suc-cessful was the Harley brand, the more it could expect its bigger competitors to target its own market niche. Honda, Suzuki, Yamaha, and Kawasaki had long been offering V-twin cruisers styled closely along the lines of the classic Harleys – but at lower prices, with more advanced technologies, and in some dimensions, superior performance. In competing against Harley, the Japanese manufacturers’ key advantage was their sales volume. Harley’s single-segment focus and concentration on the US market meant that it produced a much smaller volume of bikes than any of the Japanese producers. The most striking comparison was between Harley-Davidson and Honda: Harley’s total of 291,000 bikes in 2003 was dwarfed by Honda’s 5 million bikes in the same year. These volume differences had important implications for Harley’s ability to access economies of scale and for its vulnerability to factors influencing its dominant market – the US market for heavyweight motorcycles.

In addition, Harley lacked the diversification of its rivals. Honda, BMW, and Suzuki were important producers of automobiles and more than one-third of Yamaha’s turnover came from boats and snowmobiles. These companies could benefit from sharing technology, engineering capabilities, and marketing and distribution know-how across their different vehicle divisions. In addition, sheer size conferred greater bargaining power with suppliers.

Also, Harley was facing competition from other specialists producing retro-styled cruiser bikes. In recent years Excelsior, Polaris (Victory), and Big Dog had all entered Harley’s markets during the late 1990s, but with only limited success.

Appendix 2 gives profiles of several competitors of Harley, while table 8.4 shows price comparisons.